AMD Completes, Further Explains ATI Acquisition

AMD announced today that it has completed its $5.4-billion acquisition of Canada’s ATI Technologies.

In welcoming ATI formally into the AMD fold, the chipmaker provided further insight into on how ATI’s chipsets and graphics processors will be integrated into AMD’s microprocessors.

AMD announced a project code-named Fusion that will merge a PC processor with an integrated graphics processor core by 2008 or 2009. AMD believes, not unreasonably, that graphics processors will become more critical to PCs  as more games and multimedia applications become more advanced.

Although I understand the rationale for AMD’s acquisition of ATI, I still think the price it paid was steep, necessitating a loan of $2.5 billion in cash from Morgan Stanley Senior Lending.